Jan. ETI slips, as seven components decline

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The Conference Board's Employment Trends Index (ETI) fell to 109.56 in January from a downwardly revised 110.96 in December, first reported as 111.61, and is up 5.4% from a year ago, the group announced Monday.

The base year of the composite index is 2016=100.

"Due to the government shutdown, some of the components in this month’s Employment Trends Index release were unavailable or biased. Therefore, we encourage users to take this month’s decline with some caution," said Gad Levanon, chief economist, North America, at The Conference Board. "However, we can still conclude that the index has experienced some softening since the summer, suggesting that job growth will slow down in 2019. Overall economic activity rapidly grew through the end of 2018, suggesting that employment growth will remain solid in early 2019, but as the economy slows down, job growth will also slow down later in the year. A slowdown in job growth is not unexpected in an economy that has expanded for this long and reached such a low unemployment rate."

The decreasing indicators — from the largest to the smallest — were: the ratio of involuntarily part-time to all part-time workers, the percentage of firms with positions not able to fill right now, percentage of respondents who say they find “jobs hard to get,” initial claims for unemployment insurance, job openings, real manufacturing and trade sales, and industrial production, according to the Conference Board.

The ETI aggregates eight labor-market indicators, each of which has proven accurate in its own area. Aggregating individual indicators into a composite index filters out so-called "noise" to show underlying trends more clearly.

The eight labor-market indicators aggregated into the ETI include: Percentage of respondents who say they find "Jobs Hard to Get" (The Conference Board Consumer Confidence Survey); Initial Claims for Unemployment Insurance (U.S. Department of Labor); Percentage of Firms With Positions Not Able to Fill Right Now (National Federation of Independent Business Research Foundation); Number of Employees Hired by the Temporary-Help Industry (U.S. Bureau of Labor Statistics); Part-time Workers for Economic Reasons (BLS); Job Openings (BLS); Industrial Production (Federal Reserve Board); and Real Manufacturing and Trade Sales (U.S. Bureau of Economic Analysis).

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